ANCHOR (OFF-CAMERA) ENGLISH SAYING:

International Consolidated Airlines, it practically doubled in price in 2013. Hasn't that stock gotten ahead of itself?

KATRINA DUDLEY, MGR., FRANKLIN TEMPLETON MUTUAL EUROPEAN FUND, (ENGLISH) SAYING:

This is the old British Airways and Iberia. And we see an opportunity there because the stock has moved off its lows but it was trading well under the value of the invested capital in that franchise. We're the stock has traded up but it's still trading it below the invested capital. We believe that the airline industry has fundamentally changed its stripes. And we think that the CEOs are really focusing on containing capacity which will enable them to get pricing. That pricing will see returns in the sector increase, and increasing returns means that the shares should trade above the cost of capital. So there's still opportunity. Yes, the stock has moved significantly. Maybe it'll trade sideways for a period of time, but that's okay with us.

ANCHOR (OFF-CAMERA) ENGLISH SAYING:

But Katrina, looking at the global airline picture, we've got a new number one airline in terms of size, US Airways and American Air merging. How will that change the picture in terms of competing for share?

KATRINA DUDLEY, MGR., FRANKLIN TEMPLETON MUTUAL EUROPEAN FUND, (ENGLISH) SAYING:

Well, one of the most profitable routes for British Airways is actually the route from London to New York's JFK Airport, and that's one that they co-chair with American. So the fact that they're co-chairing with one of the biggest airlines in America is a good point for them. What you could see is American starting to, you know, use that hub-and-spoke bringing people into JFK and then transporting them across to London on a British Airways flight, and will make the money there.

ANCHOR (OFF-CAMERA) ENGLISH SAYING:

Vodafone, getting rid of its stake in Verizon Wireless. Does that make it more attractive in any way?

KATRINA DUDLEY, MGR., FRANKLIN TEMPLETON MUTUAL EUROPEAN FUND, (ENGLISH) SAYING:

There's been a lot of speculation about Vodafone and what will happen post the sale of the Verizon Wireless stake. We've got management that's out there with Project Spring, and we think that that's very optimistic for Vodafone as a standalone entity. We've had, you know, obviously the comments out of AT&T that they may be interested in a European player and this is probably the one that meets their needs best. But if we take a look at- while the shares have a little bit of a takeover premium in there, we still think that even if that takeover doesn't happen, there's significant value as a standalone entity in Vodafone so we're continuing to hold it.

ANCHOR (OFF-CAMERA) ENGLISH SAYING:

So even if it's not taken over, where is the value? What is it doing? How's it growing?

KATRINA DUDLEY, MGR., FRANKLIN TEMPLETON MUTUAL EUROPEAN FUND, (ENGLISH) SAYING:

It's going to be doing this Project Spring which is an organic investment strategy to generate growth to Vodafone. So that's the reason we're positively, we're actually optimistic and positive about their long-term prospects.

ANCHOR (OFF-CAMERA) ENGLISH SAYING:

Alright. You really sound positive about 2014.

KATRINA DUDLEY, MGR., FRANKLIN TEMPLETON MUTUAL EUROPEAN FUND, (ENGLISH) SAYING:

We are.